Why Use an Affordability Calculator?
Buying a home is a huge commitment, and the first question you need to answer is “What price of home can I afford?” Our Mortgage Affordability Calculator is designed to answer exactly that. Rather than doing mental math or using generic formulas, this tool accounts for Singapore-specific rules (like TDSR and MSR) and gives you an accurate estimate of your home-buying budget. This matters because you don’t want to be out there looking at $1 million condos if realistically you can only afford $700k, or conversely, you might be limiting yourself to a cheaper home when you actually could comfortably afford a bit more. The calculator saves you time by narrowing down a sensible price range. It also helps you plan – you can see how tweaking inputs (like reducing other debts or using a bigger downpayment) can increase your affordability. Essentially, it’s the starting point for any homebuyer, ensuring you “plan before you plunge.”
How Cashew’s Calculator Works (Tailored for Singapore)
Cashew’s affordability calculator is locally tailored, meaning it’s programmed with all the latest Singapore regulations and typical bank criteria. Here’s what it considers:
- Income: You’ll input your (and co-borrower’s, if applicable) monthly income. The calculator annualizes it and applies the TDSR 55% cap to determine the maximum monthly debt repayment you can have.
- Existing Debts: You can input any monthly debt obligations (car loan, student loan, credit card bills, etc.). The calculator will deduct these from the allowable TDSR limit. For example, if 55% of your income is $2,750 and you have a car loan of $500/month, only $2,250 is left for the home loan.
- Loan Tenure and Interest Rate: We use a conservative approach by default – assuming a certain stress interest rate (currently around 4% p.a. as per MAS guidelines) and likely the max tenure based on property type (30 years for private or 25 for HDB if you indicate an HDB property). This ensures the loan amount estimate is within regulatory limits. You can adjust the tenure if you plan for shorter, and interest rate if you want to see impact of higher/lower rates.
- MSR (if applicable): If you indicate the property is HDB or EC, the calculator will also apply the MSR 30% rule and use the stricter of TDSR vs MSR in calculations.
- Downpayment/CPF: We ask how much you have in CPF OA and cash for downpayment. Why? Because even if you qualify for a high loan, you might be limited by the 25% downpayment requirement. The calculator will check that your entered property price doesn’t demand more downpayment than you’ve got. For example, if you enter you have $100k available, it won’t spit out a $1 million home as affordable because 25% of $1M is $250k which you don’t have. Instead, it might cap at $400k property (since 25% is $100k).
- Outputs: After inputting the data, the calculator provides key results: the maximum property price you can likely afford, the loan amount you’d be eligible for, and the required downpayment (split into cash vs CPF if applicable). It also shows an estimated monthly mortgage payment at the assumed interest rate, so you get a sense of the ongoing commitment. Additionally, it will show if any of the limits (TDSR, MSR, LTV, cash) was the binding constraint. For instance, it might say “Based on your inputs, you can afford up to approx $800,000 purchase price. (Limited by your available downpayment.)”
The calculations behind the scenes follow MAS guidelines, so it’s very accurate to what banks will compute. We update it promptly whenever rules change (like if TDSR or LTV limits are adjusted). It’s like having a personal banker do a vetting for you, but instantly online.
How to Use It (and Tips for Best Results)
Using the calculator is straightforward: just fill in the fields with your numbers. Be honest and realistic – use your actual income (fixed salary, average commission or bonus if applicable, etc.) and actual debts. Some tips:
- If you’re planning with a spouse or co-buyer, include both incomes and all debts for a combined picture.
- Don’t forget to include things like a student loan or renovation loan you co-signed, etc., in debts. If you leave them out, the calculator might overestimate your budget and the bank will catch it later anyway.
- If you know the type of property, select it (HDB vs private) so MSR can be applied if needed.
- The default interest rate (we might put e.g. 4%) is a “stress test” rate. You can also toggle to see at actual current rates (like 2% for example) to know your monthly payment at current rate, but the approval capacity will still consider the stress rate because that’s what banks do. We make note of that in the interface.
- Play around with it: Try “what-if” scenarios. What if you pay off that car loan? Input zero for that and see how your max price might jump. Or what if you wait to save more downpayment? Increase the downpayment field and see the effect. This can help you strategize – maybe it’s worth clearing a debt before buying, or you’ll know you need $X more in CPF to reach the condo price you aim for.
- Use the monthly payment output to gauge comfort: Even if the calculator says you can afford $800k, look at the monthly payment number. Are you comfortable paying that every month? If it seems high relative to your take-home pay (remember the calculator uses gross income), you might decide personally to target below the max. Affordability is not just about what the bank allows, but what you feel okay with.
- Save or print the results. Cashew’s tool lets you create a PDF summary or save it to your account. This is handy if you want to discuss with a co-borrower or an advisor.
Planning Your Next Steps with Confidence
Once you have your affordability result, you can proceed with confidence into the home search or loan pre-approval knowing your ballpark. For example, if the calculator says max $800k, you might look for properties around $700k to $800k. If it says $1.2M, you know that $1.5M dream home is out of reach for now. This prevents wasted time and heartbreak. Also, you can use the info to get an In-Principle Approval from banks through Cashew. In fact, after using the calculator, the tool might prompt you like, “Ready to verify your affordability with a bank pre-approval? Click here to submit an IPA request.” With your permission, it can port over some of the data you input to streamline that application.
Our goal with the Mortgage Affordability Calculator is to empower you – so you’re not blindly guessing or solely relying on an agent who might push you to your max. It puts the control in your hands with solid data. Thousands of users have used it and told us it helped them set realistic expectations and made them more prepared in the buying journey. Best of all, it’s completely free to use, and you can revisit it any time if your situation changes (e.g., after a pay raise or clearing a debt). It’s like having a financial compass for your home purchase.
So before you start calling property agents or visiting showflats, take a few minutes to try Cashew’s affordability tool. It’s quick, it’s easy, and it’ll give you a professional-grade assessment of your home-buying power. With that knowledge, you can house-hunt smarter and negotiate better, knowing exactly what fits your budget. Plan like a pro, and happy home shopping!
Sarah Chen
